In case the public has forgotten, let’s reprise the basic cause of the housing bubble and the financial meltdown that has culminated in our current Great Recession.
Wall Street was saddled with subprime loans which it marketed, thanks to the liquidity promoted by the Federal Reserve.
Those subprime loans were given birth by:
One: The 1992 Federal Housing Enterprises Financial Safety and Soundness Act (GSE Act)
Two: Fannie Mae and Freddie Mac who were to buy $6 trillion of single-family loans over 16 years.
Three: The 1977 Community Reinvestment Act (CRA) to low income and moderate income communities.
Four: All aided by Acorn (Association of Community Organizations for Reform Now)
It would thus appear the deep recession we have is a product of our Congress and its pandering populist politicians who, to this very moment, blame everyone but themselves for the imposed disaster.
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